American Eagle Outfitters, Inc. AEO is showing sequential improvement at its American Eagle (AE) brand as it refines its product strategies, with women’s customers responding well to outfitting, fashion bottoms and new denim fits. In the second quarter of fiscal 2026, American Eagle brand sales increased 1%, while the company’s consolidated sales grew 8%. American Eagle saw strong customer acceptance of new women’s denim fits, including wide-leg straight and low-rise styles. However, management indicated that there remains an opportunity to restore consistent growth across categories.
AE’s brand awareness and cultural significance remain strong, while its active customer file continues to grow. These trends provide a broader backdrop as the company works to improve performance across categories and refine its product strategies. Denim has become an area of sequential improvement as American Eagle adjusts its assortment toward better-performing fits.
Management said that new fashion fits, particularly wide-leg straight and low-rise, gained strong customer acceptance. Jennifer Foyle said that the company has seen sequential improvement in denim after pivoting toward the fits that were working, with low-rise becoming a key focus. The repositioned denim assortment also featured in the company’s back-to-school marketing launch.
The broader outlook indicates that denim performance is improving alongside broader efforts to strengthen the business. The company is focusing on product strategy, traffic and conversion. Marketing is shifting toward conversion-focused spending, alongside continued efforts to rebalance inventory and work through older and seasonal merchandise.
However, management indicated that further work remains. AE is still working through older denim fits and rebalancing inventory, while women’s bottoms have improved but remain mixed. Pants and cargoes have performed exceptionally well, although the company still has work to do to rebalance denim. Overall, American Eagle’s new denim fits are gaining customer acceptance, with sequential improvement in denim. Management continues to see opportunities to improve performance and rebalance inventory.
The Zacks Rundown for AEO
AEO’s shares have declined 2.4% in the past six months compared with the industry’s decline of 13%. The company currently carries a Zacks Rank #3 (Hold).
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From a valuation standpoint, AEO trades at a forward price-to-earnings ratio of 7.98X, lower than the industry’s average 11.90X.
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The Zacks Consensus Estimate for AEO’s current fiscal year earnings implies 44.7% year-over-year growth, while the same for next fiscal year earnings implies a 12.4% year-over-year decline.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
FIGS, Inc. FIGS operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 19.7% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.
Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. At present, Boot Barn carries a Zacks Rank of 2.
The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.8% and 23.5%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.
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American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report
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